House prices in Abu Dhabi are likely to remain stable in the first quarter, but rents will keep declining due to increased supply, property consultancy Landmark Advisory said on Tuesday.

'We expect continued relocation from Abu Dhabi to Dubai, which will put further downward pressure on Abu Dhabi rents,' said Jesse Downs, the firm's director of research and advisory services.

Rents for high-end homes in the United Arab Emirates' capital fell by up to 15 per cent in the fourth quarter, but it was low-quality units that fared worst, Downs said.

Residential prices were stable in the fourth quarter, but sales volumes increased relative to previous quarters, the report said.

Office rents in the capital, home to most of the country's oil, are also likely to keep falling as more supply is delivered and landlords become increasingly flexible to guarantee good occupancy rates, it said.

In neighbouring Dubai, villa prices were unchanged in the fourth quarter while apartments fell by 4.3 per cent.

Average rents for villas and apartments fell 2.2 per cent and 3 per cent respectively, the report said.

House prices in Dubai are seen falling a further 10 per cent in 2010, while prices in Abu Dhabi will likely be unchanged, a Reuters poll showed in January.

Rents in Dubai and Abu Dhabi are expected to fall 10 per cent and 15 per cent respectively, the poll found.-Reuters